Watch out Novo, Lilly is closing the gap in the weight-loss drug race
Watch out Novo, Lilly is closing the gap in the weight-loss drug race
The FDA’s approval of Eli Lilly’s obesity drug Zepbound in November 2023 officially marked the start of a two-horse race with Novo Nordisk’s blockbuster weight-loss medication Wegovy. While Novo got an early lead, securing the regulator’s approval of Wegovy in June 2021, Lilly has quickly made up ground as evidenced by the company’s extraordinary second-quarter results announced on Thursday.
In Q2, Lilly handily beat Wall Street estimates with Zepbound sales of $1.24 billion, well above the $922.2 million that analysts had expected—and more than double the $517 million the company reported in Q1. Bear in mind that this is only the second full quarter of sales since the FDA’s approval. At the same time, Lilly’s type 2 diabetes medication Mounjaro, which shares the same tirzepatide active ingredient as Zepbound, raked in $3.09 billion in Q2—well above analysts’ expectations of $2.39 billion.
On the basis of these numbers, Lilly on Thursday raised its full-year revenue forecast by $3 billion. And the company “appears poised to generate an additional $7 billion in revenue in 2025 above previous consensus estimates,” Axios reported, citing Evercore ISI analyst Umer Raffat.
By comparison, Novo’s semaglutide products Ozempic and Wegovy both fell short of analyst expectations in Q2 due to supply headwinds. Novo reported Wednesday that Wegovy’s sales in the quarter jumped 53% to $1.7 billion, significantly below analyst forecasts of nearly $2 billion. In contrast to Lilly, the company cut its full-year profit outlook this week.
“Given competitor’s recent results (missed on Wegovy) and [Eli Lilly’s] results from today, recent announcement regarding cessation on FDA shortage list, we see potential for [Lilly] to be the leader in this space,” Truist Securities analysts wrote in a Thursday note to investors.
BMO Capital Markets analyst Evan Seigerman told CNBC that “if we see more supply kind of easing with Lilly, we could see a market share shift.”
